Telecom entities Vodafone India and Idea Cellular have announced their leadership team in the run-up to the merger. Last March, both telcos decided to merge themselves after their existence was threatened by the newcomer Reliance Jio. The new team includes Balesh Sharma (as CEO), Akshaya Moondra (as CFO), and Ambrish Jain (as COO), and a host of other executive and non-executive appointments. Until the new entity gets necessary approvals, the existing managements of the telcos continue to run the show.

It's expected that the merger will be completed by May this year - nearly 14 months after the first announcement. In India, the list of approvals required for mergers and acquisitions (M&A) in the telecom sector is comprehensive. In the case of Idea-Vodafone, most of them have already been taken, including approvals from SEBI (Securities and Exchange Board of India), CCI (Competition Commission of India), shareholders and NCLT (National Company Law Tribunal). It still needs clearances from DIPP (for foreign direct investment clearance) and DoT (department of telecom). The officials in the Idea and Vodafone were expecting the deal to materialize in the last quarter of 2017-18. They now hope to conclude it in the first quarter of 2018-19.

Once the approvals are done, the new entity will start working on the synergies, the central theme of the merger. While some groundwork on the synergy part is already underway, the actual implementation will happen after the merger.

As per the official statements, the combined entity is expecting annual synergies of about Rs 14,000 crore from 2022 onwards. It's expected that the combined entity will be in a position to plan their costs and capital expenditure requirements better. For instance, there's a significant overlap of telecom towers and other infrastructure of the two entities which can be rationalized.

Further, rationalization of the workforce, service centres, back office, distribution, marketing, service partners and general administration would reduce the operating expenses of the combined telco. The future requirement of additional spectrum will be much lesser for the combined entity.

The other focus area would be to unleash a new paradigm of marketing and branding efforts for the combined entity. Both Vodafone and Idea have established strong brand identities over the years. The task of the new team is likely to be leveraging the existing brand strengths to take on strong competitors like Airtel and Jio.

The biggest advantage of the combined entity is going to be its large subscriber base (over 400 million) and market leadership position. However, this strength is not going to help the new entity in a big way. The telecom war is currently revolving around tariffs, and Jio (with its deep pockets) seems to be dictating the terms of the battle with its hyper-competitive plans. It remains to be seen how the Vodafone-Idea combine, both of which are bleeding profusely individually, responds to the tariff war